Location and Description.
In the mid-west of the United States of America Wyoming is situated. It forms an almost exact rectangle 280 miles wide by 360 miles long making it the tenth largest state and also one of the least populated.
Basically, Wyoming is a big plateau broken by many high mountain ranges. The Great Plains meets the Rocky Mountains in the state of Wyoming. Its north western corner contains the famous Yellowstone National Park.
Advantages.
Marked by a lack of bureaucracy in arranging its corporate affairs and by a few regulations, Wyoming allows the following advantages:
- Elimination of State Income Taxes
- Nominee officers are permitted
- Single ownership and control
- Characteristics of Strong Asset Protection
Three Types of Wyoming Corporate Entities.
Three types of corporate entities are offered by Wyoming - the S-Corp, the C-Corp and the Limited Liability Corporation (or LLC) and it is this last category that usually offers the most advantages.
The concept of the LLC is pretty new and is one of the most interesting developments in trust and international corporate work in recent years. In the year 1977 the first LLC statutes were instituted in Wyoming. Wyoming has had Limited Liability Companies longer than any other state and also has strong laws protecting the members and managers of an LLC. It has therefore become a very good choice for establishing LLCs.
LLC Explained
An LLC has corporate personality and form. But it is categorized as a partnership under the Internal Revenue Code (USA). Actually, the LLC is not separately taxable but its income is made to flow through to its members who are taxed in accordance with the US principles as if they had received the income directly. Non-residents of the US are only taxed on US source income or income which is related to the conduct of a US business or trade. In case the LLC only earns income which falls outside this definition and the LLC members are non-US resident (that too with no US presence) then no tax would be levied on either the LLC or its members.
Therefore, a non taxable structure can be made by having non US companies or individuals as the LLC members. In case the LLC had individual members, then those members would most probably suffer taxation on profits which they received from the LLC in their country of residence. So, the advisable structure is to have two offshore companies as the LLC members.
Uniqueness of the LLC.
The United States of America has signed taxation treaties with almost all the developed countries. These taxation treaties considerably reduce the level of tax which must be held back on the payment of dividends, royalties and interests to an US corporation or individual. There are many opinions regarding whether an LLC falls within the terms and conditions of these taxation treaties or not. The LLC is a comparatively new product so there is little precedence available which can give assistance in determining the treatment of an LLC by non US countries in connection to the taxation treaties. Thus, even if it appears as if an LLC may be very helpful in any tax planning exercise, we advice that care should be taken and that a suitable legal opinion must be sought. We can gather such legal opinion from an expert tax lawyer of the US upon request.
The US LLC is a zero tax company of low profile and enjoys the privileges and protection provided by the legal system of the US.
Wyoming LLC Quick Facts.
THE WYOMING LLC
The incorporation of an LLC is possible in many states of the US but for the reasons mentioned above Wyoming is a suitable choice. Followings are the characteristics of a Wyoming LLC:
TAXATION
A properly structured Wyoming LLC with no US source income or income related with the conduct of a US business or trade would not be subjected to any form of US income tax. It should be noted however that all US entities fall under the Federal Tax System.
MEMBERS
Only one LLC member is required and that one member LLC would be tax transparent. Generally tax free status is ensured by maintaining two or more than two members. Members are equal to the shareholders of a normal corporation. However they hold "units" instead of shares. Details of incorporating members are available in the public file. In our advised structure, the members would be offshore companies so that anonymity is retained.
MANAGERS
Normally one or more managers are appointed. Their functions and responsibilities are similar to that of the directors of a company. The members may choose to carry out the management of the company themselves in a manner similar to the way in which the partners of a partnership carry out their affairs. Details of the manager(s) are available on the public file. However through the usage of our service anonymity can be maintained.
ANNUAL REPORTING
The annual return must be filed with the Secretary of State every year along with the details of the members of the LLC. On condition that the LLC doesn't conduct any US business or receives any US source income, neither the LLC nor its members (foreign) would be needed to file tax returns (US).
TIME SCALE
The Incorporation is generally complete within 48 hours. But, it does take about 7 days for the documents to arrive from Wyoming. There is no stock of ready-made companies..
RESTRICTION ON NAME AND ACTIVITY
It is a must for the name to end with the words "Limited Liability Company" (or "LLC"). Words such as trust, bank, college, university or school, etc. or activities associated with such words cannot be used.
LOCAL REQUIREMENTS
The company must maintain, within Wyoming, a registered office address and it must also appoint a resident of Wyoming as the company's registered agent.
Disclaimer: While every effort has been made to ensure that the details contained herein are correct and up-to-date, this information does not constitute legal or other professional advice. We do not accept any responsibility, legal or otherwise, for any error or omission. Please contact us to clarify any questions you may have..
